The latest in Mr Gates' and Co's crusade to monopolise the worlwide internet and I.T industry?......

A knee jerk reaction to a major threat to Microsoft's world domonation? .......

Or simply a good financial move from one of the world's richest companies? ......

Below is the press release from MSN / Reuters telling all about Microsoft's investment in FaceBook. Read below and make up your own mind....

Microsoft Corp beat out Google on Wednesday in a battle to invest in socializing Web site Facebook, agreeing to pay $240 million (117 million pounds) for a 1.6 percent stake in the Web phenomenon.

Microsoft also clinched exclusive rights to sell ads on Facebook outside of the United States as part of the investment that valued Facebook at $15 billion -- on par with the market capitalizations of retailer Gap and hotel chain Marriott International. Analysts said Microsoft paid a steep price on a bet that the three-year-old company would be able to transform itself into a hub for all sorts of Web activity.

"The only way this works is if Facebook becomes sort of the users' operating system on the Internet -- everyone logs into Facebook every day to get in contact with their friends and use a multitude of future applications that will be developed for it," said Morningstar analyst Toan Tran.

Facebook, a social network that lets friends share information, allows outside developers to create games and other applications for its site.

The popularity and depth of knowledge Facebook has about its users makes it valuable to companies like Microsoft and Google which want to sell advertising targeted to individual preferences.

Founded in 2004 by Harvard student Mark Zuckerberg, Facebook said it registers 250,000 new users a day, 60 percent of whom come from outside the United States.

Kevin Johnson, president of Microsoft's platform and services division, said the $15 billion price tag for Facebook is based on Microsoft's belief that the site could eventually reach 300 million users, who can be targeted for advertising. It has nearly 50 million today.

"You combine the number of users with the monetization opportunities and you can figure out a fairly modest average revenue per user per year and you can very quickly get to this level of valuation," Johnson said in a conference call with analysts and reporters.

Microsoft has stepped up efforts to be a player in the $40 billion market for online advertising, which the company expects to double in size within three years. It paid $6 billion to acquire digital advertising firm aQuantive in August.

Under the Facebook deal, Microsoft would be the exclusive third-party advertising platform for Facebook extending a previous deal for Microsoft to sell banner advertising next to Facebook member profiles in the U.S. until 2011.

GOOGLE VS. MICROSOFT

Google and Microsoft, now rivals for Internet-based audiences and applications, have butted heads before for Internet properties. Google beat Microsoft with a $1.65 billion acquisition of online video sharing site YouTube last year.

Forrester Research analyst Charlene Li said that Microsoft was a better strategic fit for Facebook, since it knew how to work with software developers and build computing environments -- such as its Windows operating system.

"Microsoft is a company that knows how to build platforms, knows how to develop relationships with developers. Microsoft developed the network that is the biggest, most vibrant one out there," she said. "Google didn't bring as much to the deal."

Facebook opened its doors to users beyond an original base of college students a year ago. It also opened the doors to outside developers and there are tens of thousands of developers writing Facebook applications, the company said.

Microsoft was one of many suitors looking to participate in its latest round of financing, said Facebook Vice President Owen Van Natta. The funds will go toward doubling the company's staff over the next year and other growth initiatives.

Google Co-founder Sergey Brin told a meeting with Wall Street analysts at the company's Silicon Valley headquarters that his company could partner with important Web sites.

"We don't feel, at a higher level, that we need to own every successful company on the Internet," said Brin, who later told reporters that Microsoft may have overbid.

Google has a multiyear deal with MySpace, the largest social network, to provide search and advertising alongside MySpace's 110 million user profiles.

Eric Schmidt, Google's CEO, told reporters that its pact with MySpace is performing better than originally expected.

Shares of Microsoft rose slightly to $31.60 from a Nasdaq close of $31.25, while Google ticked down to $675.30 from a close of $675.82.

Facebook is great but there is absolutely nothing that cannot be replicated or enhanced in "the next big" in social networking. If someone pays a lot of money for the company and gums it up with marketing material and advertising the kids will move on to the next product very quickly.

Agree, I think this is why Microsoft only bought a very small percentage. They get access to the media, but the perception is that its still an independent site.  I get the feeling if they had bought it lock stock, users may flock as you suggest.

Yeah, a Microsoft controlled version of FaceBook would probably see a lot of drop off in their user base. Personally, I have struggled to get interested in FaceBook despite a lot of trying. I just don't find it relevant, why do I want to know if someone I haven't spoken to since school has poked, slapped or thrown a sheep at someone?!!!.

I much prefer relevant and informative social networking sites, like what we are trying to do here with YourMarbella.com ! (Shameless plug hehe) .

Yes I agree,

And the latest news is that famous celebrities are putting themselves on face book, so that the fans can talk to them.What a drag!

Whilst on the topic... I'm holding the first little 'mixer' tonight for my facebook group, "Business Owners in Spain" at Chillout cafe in Marbella (practically across the road from Goyo) if any other business owners are interested!  I should have posted the details of it up here, but have just been far too busy!

If you want to join up to the group, feel free, it's open for all business owners!! http://www.facebook.com/group.php?gid=2383087785

Microsoft, the computer empire founded by Bill Gates, has launched an audacious bid to buy the search engine Yahoo! in a deal which could challenge the dominance of Google with the technology industry's largest ever takeover.

The software giant said its offer valued Yahoo! at $31 per share, representing a 62pc premium to Yahoo!'s closing price on Wall Street last night. Shares in Yahoo!, which had declined 18pc this year before today, soared 51pc to $28.90 in early trading. Microsoft shares slipped $1.30 to $31.30. Yahoo has said it will examine Microsoft's proposal.

Jordan Rohan, an analyst at RBC Capital, said: "It shows how serious the threat is from Google. Investors are losing patience with the Yahoo! management team."

Microsoft revealed the terms alongside a letter from its chief executive Steve Ballmer to the board of Yahoo!, which this week announced it was culling 1,000 jobs.

The success of Google in global search has seen profits at Yahoo! decline for the past two years and prompted Jerry Yang, the company's founder, to return as chief executive in June.

Analysts reckon that Microsoft's move shows how threatened the company is by Google's dominance in the world of online search. In the US, Google had 56pc of all internet search queries last month, double the combined total for Yahoo! and Microsoft.

Despite disappointing Wall Street yesterday with its latest profit numbers, Google's founders Sergey Brin and Larry Page continue to innovate. Last year Google chairman Eric Schmidt made fresh moves beyond traditional search.

He followed 2006's acquisition of video-sharing site YouTube with the controversial $3.1bn takeover of ad-serving company Double-Click last April.

The deal, which has been cleared in the US but is awaiting a ruling by the European Commission, could see Google extend its powerful position in search into online display advertising.

Mr Ballmer said he was confident a combination could generate $1bn in cost-saving in a deal that will surpass KKR's £26bn takeover of First Data Corp.

In the letter Mr Ballmer writes: "In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together.

"These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace.

"We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected.

"While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing."

For example, Hotmail, Microsoft's web-based email service, could be incorporated with Yahoo! Mail, with the possibility of a new brand being created which brings together the best parts of both services.

The search engines of both companies - Yahoo! search and Live search - could also be merged as part of a drive to steal Google's crown as the leading search engine on the internet.

Microsoft's bid for Yahoo! comes at a time when the search engine is struggling to compete with its rival Google.

Microsoft said it was confident that merging the two companies would create a business that could take on Google. However, the news received a mixed welcome from industry experts.

Tanya Goodin, the chief executive at Tamar, which advises leading brands on search strategies, said: "Independently Yahoo! and Microsoft have failed to close the gap on Google; in fact, they have failed to plug the dam that is leaking users to Google.

"While there are undoubtedly great synergies to be had from aligning the businesses, do two wrongs make a right? Why would they get the right answer by working together when working apart they were going backwards?"

However, Colin Gillis, from Canaccord Adams, said: "It is a fantastic offer. It is game on. This consolidates the marketplace down to Google versus Microsoft. These two companies will be going head to head."

Yahoo! said in a statement that it had received "an unsolicited proposal" from Microsoft to buy the company.

It added: "The company said that its board of directors will evaluate this proposal carefully and promptly in the context of Yahoo!'s strategic plans and pursue the best course of action to maximise long-term value for shareholders"

Microsoft's move follows disappointing figures last night from Google, which nevertheless still dominates in search, despite attempts by Microsoft and Yahoo! to regain ground.

Emarketer estimates that Google raked in 75pc of US paid search advertising in 2007, up from 60pc in 2006. With number two Yahoo! collecting a mere 9pc share with the other search engines splitting 16pc of the pie.

So, that's FaceBook and now Yahoo! that they are investing, or attempting to invest in! . What next? Will they admit that the MS Zune is rubbish and try to buy the iPod from Apple? Or the Playstation from Sony?!!

And Mr Gates, if you are reading, No, I am sorry YourMarbella.com isn't for sale ! :-)